Margin Call2011

Sam Rogers:
Thank you all for coming in a little early this morning. I know yesterday was pretty bad and I wish I could say that today is going to be less so, but that isn't going to be the case. Now, I'm supposed to read this statement to you all here, but why don't you just read it on your own time and I'll just tell you what the f*** is going on here. I've been here all night, meeting with the Executive Committee, and the decision has been made to unwind a considerable position of the firm's holdings in several key asset classes. The crux of it is, in the firm's thinking, the party's over as of this morning. There's going to be considerable turmoil in markets for the foreseeable future, and they believe it is better that this turmoil begins with us. As a result, the firm has decided to liquidate its majority position of fixed-income MBS...today. These are your packets, you will see what accounts you're responsible for today. I'm sure it hasn't taken you long to understand the implications of this sale on your relationships with your counterparties and, as a result, on your careers. I have expressed this reality to the Executive Committee, and they understand. As a result, if you achieve a 93% sale of your assets, you will receive a $1.4 million one-off bonus. If the floor, as a whole, achieves a 93% sale, you will get an additional $1.3 million apiece. For those of you who have never been through this before, this is what the beginning of a fire sale looks like. I cannot begin to tell you how important the first hour and a half is going to be. I want you to hit every bite you can find: dealers, brokers, clients, your mother if she's buying. And no swaps. It's outgoing only, today. Obviously, this is not going down the way that any of us would have hoped, but...the ground is shifting below our feet. And, apparently, there's no other way out.